EXHIBIT 10.96

                     THIRD AMENDMENT TO AMENDED AND RESTATED
                     EMPLOYMENT AGREEMENT OF JAMES A. STROUD

This third amendment (the "Third Amendment") to the Amended and Restated
Employment Agreement of James A. Stroud (the "Employment Agreement") is entered
into effective as of November 8, 2000, by and between Capital Senior Living
Corporation (the "Company") and James A. Stroud ("Stroud").

WHEREAS, the Company and Stroud entered into the Employment Agreement dated
October 8, 1997, as amended on March 22, 1999, and May 31, 1999 (the "Employment
Agreement"), and

WHEREAS, the Board of Directors of the Company on November 8, 2000, authorized
an amendment to the Employment Agreement of Stroud regarding Triad Senior,
L.L.C., and

WHEREAS, the Company and Stroud desire to amend the Employment Agreement,

NOW, THEREFORE, in consideration of the foregoing, the mutual promises of the
parties hereto and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

         1.       Subparagraph (i) in the second sentence of Paragraph 9 shall
                  be amended to read:

                  (i) Employee's ownership of a class of securities listed on a
                  stock exchange or traded on the over-the-counter market that
                  represents five percent (5%) or less of the number of shares
                  of such class of securities then issued and outstanding, and
                  Employee's ownership of a class of securities in Triad Senior,
                  L.L.C. (or any other entity(ies) used by Triad Senior, L.L.C.
                  to acquire the general partner interest in the Grand Court
                  partnerships), provided that Employee shall not be a director,
                  officer or employee of Triad Senior, L.L.C. (or any such
                  entity(ies) used by Triad), and

         2.       Except as expressly provided herein, all of the terms and
                  provisions of the Employment Agreement shall remain in full
                  force and effect and unchanged. All capitalized terms used
                  herein which are not otherwise defined herein shall have the
                  meaning ascribed to such terms in the Employment Agreement.

IN WITNESS WHEREOF, this Third Amendment has been duly executed on the day of
January, 2001.
                        COMPANY:  CAPITAL SENIOR LIVING CORPORATION


                        By: /s/ DAVID R. BRICKMAN
                           -----------------------------------------------------
                           David R. Brickman, Vice President and General Counsel

                        STROUD:


                        By: /s/ JAMES A. STROUD
                           -----------------------------------------------------
                           James A. Stroud